Register Disbursement Case - Case Study “a Silent Crime”

In the case study “A Silent Crime”, there are several red flags that are presented that would indicate that fraud is occurring. The first red flag would be the lifestyle of the part time employee. As an employee who worked 15 hours a week, Joe Anderson was living an extravagant lifestyle way above his pay from the department store. He was very well dressed and drove a custom conversion van. The second red flag should have been discovered during periodic inventory of merchandise which should have been done on a weekly or monthly basis and this would have identified that fraud was occurring when the computer system inventory and physical inventory did not balance.

According to Principles of Fraud Examination, “cash larceny may be defined as the intentional taking away of an employer’s cash with the consent and against the will of the employer” (Wells, 2008). Laura’s actions, in my opinion, were considered cash larceny instead of skimming because she took the entire deposit of the customers and those customers had already entered it into their accounting system as according to Principles of Fraud Examination, skimming is “theft of cash prior to its entry in the accounting system” (Wells, 2008). The cash and checks were already entered into the victim company’s accounting system as deposits and since Laura stole cash and checks that were already entered as opposed to taking cash or checks that have not been entered into the victims accounting system which would be skimming.

Laura’s crime may have been discovered through several different ways. Interviewing all employees to determine who was present and had opportunity to commit the fraud would be the first step. As head teller, Laura and one other teller each had one half of the combination necessary to open the night deposit vault. Because both parts of the combination would be required to gain access to the vault, those two individuals would have the best opportunity. In addition, Laura’s presence at the bank before anyone else and also before the video cameras were activated gave her access to commit the fraud and opportunity as she could have easily memorized the other tellers portion of the combination to the vault. During her interview, she broke out in a red rash which suggested she was stressed which can be indicative of guilt however, this reaction alone should not be used to determine culpability of the fraud as innocent people have been known to break out in the same rash. Laura, from her previous branch, was suspected of fraud because of a lot of unexplained shortages but nothing was able to be proven from any investigation.

The bank should install additional cameras in all areas where cash and checks will be processed and those cameras should be on continuously and the recording should be kept for a period of time to all review by bank security personnel. In addition, policies should be